About Government Refinance and Home Purchase Programs

Mortgage interest rates began dipping again in recent weeks as bad news economic news has continued to surface. With the disappointing jobs numbers that came out recently and continuing economic struggles in Europe more and more investors have been fleeing to the relative safety of US bonds, which in turn has been lowering the yield on those bonds. As we have discussed in the past, when yields on the 10-year treasury note drop mortgage interest rates normally follow. The end result is that rates on conventional and government-backed mortgages are continuing to slowly drop this week.

Of course such trends are always temporary so contact us in the sidebar this week if you have considered a refinance. With the debates over the debt ceiling still raging in Washington DC there is no telling how long it will be before rates move higher again.

The short answer to this question is: Not much so far. Mortgage interest rates on government-backed and conventional loans have remained near historic lows over the last few weeks as demand for the 10 year T-Note remains high and thus the yield remains low. But if a deal is not reached between Congress and the White House by August 2nd it is feasible that the demand for US bonds will dry up and that in turn could lead to a spike in interest rates.

If you have been considering locking in a lower rate on your mortgage it might be safest to lock in your rate soon. There is a lot riding on the debates between the GOP and the Democrats right now in Washington. All sides seem to believe a deal will get done but in the off chance it doesn’t rate could potentially go significantly higher in August. Contact us in the sidebar for more information on refinance programs that might apply to you.

There was a pretty good article over on Foxbusiness.com with some housing market predictions for the second half of 2011. One of the predictions that we think is likely is that while mortgage interest rates are likely to remain low by historical standards, they are unlikely to remain as low as we have seen in the recent dip that has from May to June. In fact, in the last week of June we already saw a small sell off in bonds which caused mortgage interest rates to start rising again for the first time since April. We expect that rates will rise somewhat in the coming months for all mortgage types, including government-backed mortgages.

If you have been rate watching as you consider a refinance now is probably a good time to contact us in the sidebar to learn which programs might work for you and to get some estimates put together.

Here is a quote from that article mentioned above:

Mortgage rates are near record lows, but some mortgage experts say the party won’t last long as they expect rates to climb in the next few months. They don’t foresee a major spike, but rather an adjustment to bring them back to “normal” levels.